Teladoc Health Inc. and Livongo Health Inc. are merging in a $18.5 billion dollar deal that is expected to close in the fourth quarter. Yahoo Finance's Alexis Christoforous and Ines Ferre break down details.
ALEXIS CHRISTOFOROUS: We have a merger in the virtual health care space to tell you about this morning. Teladoc Health and Livongo Health are combining in a deal worth $18 and 1/2 billion. Our own Ines Ferre is here to break this one down for us. Good morning, Ines.
So Teladoc CEO Jason Gorevic was actually on this show just last week. He's going to be the CEO of the combined company here. What does it mean for all of us that this new big deal in telemedicine?
INES FERRE: Well, this is really part of Teladoc's strategy for the ability to connect data with patients. So just to give you a little bit of background on Livongo, the company that it's merging with. Livongo is a digital health company. They make blood glucose meters with data that's uploaded to this analytic engine that they have.
So that company actually went public last year at $28 a share, and it has just soared over the last year. On its first day of trading, it was valued at $3.4 billion. This new company is going to be called Teladoc Health. And again, it's a strategy of being able to connect data.
So for example, Teladoc talks about being able to connect the Apple Health Kit, digital thermometers, so that doctors can sort of see patterns when they're administering medicine to patients. And CEO Jason Gorevic I know was on the show just last week after a really great quarter, giving his outlook for growth for the company. Take a listen.
JASON GOREVIC: We have, I would say, unprecedented visibility into our bookings and our pipeline, great strength in our continued visit volume, and all parts of our business showing very strong momentum. When you combine that with the fact that we fold in in-touch health, which has experienced great growth, we felt comfortable and confident projecting 30% to 40% growth next year.
INES FERRE: And also, just to give you an idea, Teladoc's visit volume, 60% of it is for non-infectious diseases. So really what the company is saying is is that this trend is not just-- telemedicine is not just driven because of COVID-19, I mean, it's been accelerated because of it, but telehealth is really something that's here to stay. In fact, just last Monday, you had President Trump, which signed an extension for telehealth for rural areas for Medicaid and Medicare. So this is really a trend that's here to stay.